* Dollar broadly firm, facing tough resistance at 118.60 yen
* Nikkei jumps 2.50 pct, close would be highest since Dec
* Spreadbetters point to a firm opening for European bourses
* Factory surveys point to more momentum in global economy
* Signs of faster inflation in EU, US push up bond yields
* Oil steadies after retreating from 18-month top
By Wayne Cole
SYDNEY, Jan 4 The U.S. dollar crept nearer to
14-year peaks on Wednesday as an abundance of upbeat global
economic data boosted Wall Street and signs of quickening
inflation dented fixed-income debt.
Spreadbetters pointed to a firm opening for European
bourses, while E-Mini futures for the S&P 500 added
another 0.1 percent.
The strength of the U.S. currency kept a lid on commodity
prices, but helped Japan's exporter-heavy stock market rally
toward its biggest daily increase in almost two months.
In its first trading day of the year, the Nikkei
climbed 2.50 percent and looked set for the highest finish since
December 2015. It was further aided by domestic data showing
factory activity had expanded at the fastest pace in a year.
MSCI's broadest index of Asia-Pacific stocks outside Japan
was on track for a seventh straight session of
gains, with shares up 0.2 percent.
The brightening mood followed a round of upbeat factory
surveys from China, the euro zone and United States. Analysts at
Barclays said their measure of global manufacturing confidence
hit its highest since December 2013.
U.S. factory activity sped to a two-year high amid a surge
in new orders, while manufacturing in the euro zone grew at its
fastest pace in five years.
Notably, the U.S. ISM showed a sharp pick up in raw material
prices, which stoked speculation stimulus measures proposed by
U.S. President-elect Donald Trump could generate more inflation.
Wall Street's rally was further aided by gains in Verizon
Communications and technology companies Alphabet
and Facebook. The Dow ended Tuesday up
0.6 percent, while the S&P 500 gained 0.85 percent and
the Nasdaq 0.85 percent.
Ford Motor jumped 3.79 percent on news it would cancel
a planned $1.6-billion factory in Mexico and invest $700 million
at a Michigan factory, after Trump harshly criticized the Mexico
The same news slugged the Mexican peso, leaving it at its
lowest-ever close against the U.S. dollar.
DOLLAR IN DEMAND
The dollar's strength was broad-based and it hit a 14-year
peak on a basket of currencies at 103.82 before
profit-taking pulled it back a touch to 103.32.
After an early pause on the yen, the U.S. currency edged up
to 118.11 and back toward major chart resistance around
118.60/66. A floundering euro was pinned at $1.0402,
having dived as deep as $1.0342 overnight.
The euro's decline came despite a jump in domestic bond
yields after data showed German inflation hit its highest level
in more than three years in December.
While much of the increase was due to transitory factors
such as energy, long-term inflation expectations still rose to
their highest since December 2015.
Overall euro zone numbers due later Wednesday are expected
to show inflation picked up to an annual 1 percent, from 0.6
German 10-year bond yields leaped 10 basis points to a
two-week high of 0.29 percent.
In commodity markets, oil prices steadied after losing more
than 2 percent on Tuesday. U.S. crude clawed back 40
cents to stand at $52.73 a barrel, while Brent futures
added 43 cents to $55.90.
(Reporting by Wayne Cole; Editing by Eric Meijer and Randy